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Informist, Wednesday, Oct. 28, 2026

 

--SEBI chief: Companies listing just for manipulation have to be delisted

 

MUMBAI – Companies which have no business activities, or are essentially shell companies, and got listed just for manipulation will need to be delisted from the stock exchanges, Tuhin Kanta Pandey, chairman, Securities and Exchange Board of India, said Wednesday at Business Standard BFSI summit 2026. These companies had got listed earlier through the small and medium enterprise platform of exchanges, the SEBI chairman told Informist on the event sidelines.

 

Speaking at the session, Pandey said the SME listing and trading framework itself needs to be changed to provide liquidity and to ensure issuers are not mere shell companies coming to list without any intent to produce goods or services or have genuine operations.

 

Such listed shell companies give opportunity to manipulators to take them over just for manipulation purpose, the SEBI chairman said. He was referring to the manipulation that SEBI had found in the share prices of some listed SMEs or mainboard companies which came from the SME platform. It is important to clear these deadwood companies from the market, he said. Such aberrations also pose a regulatory hazard because if SEBI tries to tighten listing regulations to prevent them from coming to the market then it becomes toxic for rest of the companies, according to Pandey.

 

SEBI is comprehensively reviewing the listing, trading, and compliance rules for SMEs. The SEBI chairman said, originally, when the SME framework was introduced, the idea was to make listing requirements less onerous for the companies and in order to protect retail investors the trading lot size was kept around INR 200,000-INR 250,000. Such high lot size kept retail investors away but also ended up pushing away liquidity, he indicated.

 

SEBI is keen that at least around 2,000 companies, out of a total of more than 600,000 SMEs in the country, with good corporate governance standards coming to the public markets to raise money for their businesses, Pandey said. The cost of coming to the public market must also be manageable, he said.

 

The market-making framework mandated for listed SMEs' secondary market trading has not worked and only added "a lot of cost" to the company. If a "small issuer is going to the market, and if a big chunk of money is being picked up by the merchant banker, like, how does it work?" Pandey said. SEBI is reviewing this and other aspects of the SME listing and trading framework, he indicated.  End

 

Reported by Rajesh Gajra

Edited by Akul Nishant Akhoury

 

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